#DearHolistic: Should we increase our referral bonus if the candidate is a person of color?

Dear Holistic,

We are thinking about upping our referral bonus if the candidate is a person of color. Is this a good idea? What should we know?

Sincerely,

Revving up Referrals

* * * *

Dear Revving up Referrals,

Many companies have considered having a higher referral bonus for candidates of color, in an effort to drive a more diverse slate of employee referrals. However, this is a complicated, controversial idea, with as many opponents as proponents. Here's what you should know if you are thinking about doing this.

You have to be really confident in your hiring process.

Employees should have gone through bias awareness training and you should feel confident that you have an equitable process. If you have holes in your hiring process, they will be exposed here. This will be particularly evident if the hiring process has historically been unfair to BIPOC candidates, and all of a sudden we start seeing a lot of folks make it through. This will lead to the whole "they just got hired because of their demographics" debate, which we don't want.

You have to commit to measuring the results.

What you want to see happen is a growth in the diversity of the applicant pool, but not necessarily a change in the flow through. In other words, we are looking to change the input at the top of the funnel, but the rate of hiring should be the same. A more diverse applicant pool will lead to a higher rate of hiring.

This would be a good outcome:

As you can see, the process itself didn't change too much, but we see a much better outcome because we infused a bunch of energy up top.

You need to find the sweet spot in terms of the amount.

We recommend a 2 to 4x bonus. Anything less than 2x can come off as disingenuine. You don't want to get caught in the whipsaw of making this move, but not really committing to it, as that can backfire. This is a good place to engage your ERG leadership, for their advice.

It needs to be communicated carefully and thoughtfully.

This is not something that you should launch without preparation. You should communicate this throughout the organization, in writing, and offer an explanation for both your motivation as well as your process. You need to have a policy in place when this launches and you need to share the details of how this will be measured and awarded. You can find a free sample policy here.

Finally, you should train your people on how to diversify their networks

One of the biggest issues with diverse referrals is not that people are disinclined to be thoughtful about referrals, it's that their network isn't big enough or diverse enough to be impactful. So we want to train our folks on how they might diversify their network, how they might find non-traditional candidates, how they might participate in this process.

We consider this idea to be a next level idea in terms of DEI. It's not for beginners, and it's not for the faint of heart. It requires a steady hand and a mature, thoughtful implementation. But, when successful, it can be very impactful, and it's something we recommend.

Visit our Diverse Referral Guide for more tips.

Yours truly,

Holistic

P.S Hit us up if you've tried this, and tell us how it went, or shoot us any questions you may have and we'll answer them.

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